CHAIN - Fourth Edition

FOURTH EDITION

EXCLUSIVES

WHERE DIGITALISATION Hapag-Lloyd’s Director of Procurement Excellence, Julia Finning, and Head of Procurement, Daniel Braune, discuss the role of digitalisation in striving for the industry-leading procurement function

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WELCOME W

e are delighted to bring you our fourth edition of CHAIN. We have five exclusive interviews included in this issue, not to mention a host of intriguing features focused on the latest supply chain topics.

First up is our interview with Izba’s Aaron Alpeter, Warren Harper and Jennifer Polce. The company has gone from strength to strength in the last few years – turn to page 6 to read the team’s advice on how to scale your business.

Nathan Lugo, COO at Staci USA, tells us how the group’s expertise in multichannel B2B, B2C and D2C logistics sets it apart from its competitors (p28), while Danny Berry, Vice President of HPE Pointnext Technology Services Supply Chain, explains how digital technologies are enhancing customer experience (p50).

Plus, we chatted to Hapag-Lloyd’s Head of Procurement, Daniel Braune, and Director of Procurement Excellence, Julia Finning (p88), as well as Spring’s former VP of Global Supply Chain and Operations, Patricia Ahufinger (p110). We would like to thank all our interviewees for their valuable contributions!

As for must-read features this issue, check out the latest blockchain developments on page 20, the growth of end-to-end supply chain platform Sourcemap (p42), plus the prevailing trend for industrial robots in North America (p124).

We hope you enjoy this issue!

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FOURTH EDITION

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Izba’s experience of building and scaling start-ups during the Covid-19 pandemic

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How can blockchain technology boost the efficiency of our supply chains?

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Nicolas Morisse, COO at Staci USA, on his company’s bespoke logistics solutions

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Sourcemap has received $10 million to expand its endto-end platform

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An exclusive interview with Danny Berry, VP of HPE Pointnext Services Supply Chain

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The US Department of Energy’s plans for a more sustainable energy supply chain

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We chat to Hapag-Lloyd’s Head of Procurement, Daniel Braune, and Director of Procurement Excellence, Julia Finning

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The shift to 24/7 supply chains

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In conversation with Patricia Ahufinger

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The surge in industrial robot orders

Patricia Ahufinger

Daniel Braune and Julia Finning

Danny Berry

Aaron Alpeter

88 Nicolas Morisse

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20 28

50 42

110

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BUILDING AND SCALING START-UPS DURING A PANDEMIC

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rior to the Covid-19 pandemic, supply chain was seen as an important part of a business. With the pandemic, many businesses view supply chain as a core strategic pillar and asset if used correctly.

Aaron Alpeter of Izba recognises how sorely fast-growing companies, in particular startups, need adequate resources

navigating today’s challenges.

He says, “We’ve focused our firm to be flexible, relationship driven, and technology forward. We are on a mission to be the undisputed thought leader when it comes to supply chain in the start-up ecosystem.”

Izba is a consulting, outsourcing and technology firm committed 8

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to helping start-ups be successful through excellence in operations.

With over 175 years of combined industry experience and a growing customer base, Izba has improved investor value by over $2 billion for its portfolio of clients in only a few years. Izba’s dedicated team prides itself on having the expertise to professionalise and streamline an organisation’s processes while adding to its bottom line. Aaron Alpeter is Principal and Founder, Warren Harper is General Manager, and Jennifer Polce is Director of Consulting, at Izba. Warren explains, “If you take a company that is starting up their business,

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they usually have great marketing ideas and a strong financial background, but they likely do not have the deep level operational expertise necessary to build and scale a company. Our consultants step in and help execute dreams into reality.”

Jennifer says Izba provides a range of services depending on the company needs – from fulfilment, manufacturing and planning, to sourcing and procurement.

She adds, “The work we do will depend on the stage the company is in. If they are working through product development, we can

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help look for strategic sourcing partners. If they are expanding their network, we can extend their fulfilment infrastructure to reach customers quicker. The same is true for freight strategy and transportation. It is all about understanding what we can do to make the service to their customers better, but also considering costs and sustainability factors.”

Izba supports clients in a variety of industries, but Aaron adds, “We

don't pretend to know everything about everything, but feel that we are end-to-end experts because 90 per cent of principles in supply chain transfer between industries, whether that is apparel, FMCG, food, or electronics.”

What lessons did the Izba team take away from the pandemic?

Jennifer answers, “You cannot just assume that something will be available. It is really important to plan on an 18-month 11

finance. Without this planning, you might have a huge spike in demand, but you wouldn’t be able to communicate to your factory fast enough to procure the right materials, or to fulfilment centres to find the labour you require to ship your products out. I think Covid has taught us that communication over that time horizon is more important than ever.”

horizon, but prior to this, a lot of companies missed having robust communication between critical functions like marketing and

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Warren highlights the importance of lean solutions that are stage-appropriate.

He adds, “Being able to adapt quickly, being quick on your feet, and being nimble are key to helping start-ups without a lot of resources grow in times of uncertainty. We can provide that lean solution that can adapt with them as their business grows over time.”

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What’s more, there are also bigger companies that are interested in having the ability to be flexible and react quickly.

Warren continues, “A number of our larger clients require these skills, so how do we bring them in? It is a real change of mindset for them. The start-up world operates very quickly, and for more traditional businesses, it is both exciting and terrifying. You really have to be on top of things all the time.”

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Jennifer adds, “With the move to more people working from home, we have been able to do things faster and partner with larger companies, because (since Covid) they are now more adept to change.”

Just like their clients, Izba also strives to stay nimble by helping fill gaps in the start-up ecosystem. Izba has recently launched a software product. Capabl is an automated fulfilment scorecard that helps brands and fulfilment centres track 14

performance. Aaron explains, “After working with dozens of companies and hundreds of fulfilment centres, we found that we were solving the same problems over and over again. In particular, fulfilment relationships were often emotionally charged when they didn’t need to be. A lot of this came from a lack of transparency. Despite signing specific performance metrics (SLAs) as part of the contract, it is very difficult for both brands and fulfilment centres to track how they are doing. As a result, fulfilment centres do not get credit for doing a good job, and brands don't see the full context when one order goes wrong.

“We initially built a manual dashboard, and used it internally for about 18 months. The increased transparency gave us some remarkable results. We had one client who felt unhappy with their fulfilment centre and wanted to move. Before doing so, we started scorecarding the current performance and dug in with the provider. The fulfilment centre recognised that they were falling short, and to their credit, made the appropriate changes. They stepped up their game and are now at 99.9 per cent fulfilment compliance, and the brand has been there for over three years.”

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Capabl connects to a brand’s shopping cart, and looks at fulfilment contract criteria to determine if orders were fulfilled on time. This data facilitates conversations between brands and fulfilment centres.

When asked if he anticipates expanding service offerings in the future, Aaron answers, “Our responsibility as a consultancy is to find the best products and the best providers for our clients regardless of who makes them. If we can’t find something that lives up to our standards, we will look to build it ourselves.”

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Resiliency is another buzzword that has come to the fore since supply chain first felt the impact of Covid. Aaron says, “We worked with clients to make sure they diversified their sales channels, with multiple factories and multiple warehouses. Some brands grew and took market share from their competitors who were not able to do that.

The industry has definitely learned a lot in the last two years.”

So, what advice would Aaron give to businesses looking to scale especially with Covid? He answers, “The first thing we tell people is that they should be

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working on an 18-month horizon, and they should assume that they are going to reinvent their supply chain every 18 months. What we find is if a company says it aspires to be a billion-dollar company, they 18

should first focus on being a milliondollar company – first things first.

We help them see what the next 18 to 36 months will look like, only building what they need at that point, so they can remain as flexible

as possible while their business is pivoting, and staying ahead of any problems that might pop up.”

Jennifer believes it is extremely important to build strong relationships with suppliers and fulfilment centres for start-ups to grow, especially in this environment. She continues, “Overall, visibility and communication are key. Without strong supplier relationships, operations can go wrong in many ways. By leveraging the strong relationships you have, regardless of your size, you can really launch your business forward.”

Jennifer adds, “It is important that partners are equally yoked and share the same values.

For example, we had one client that wanted music to be played during the pack-out of their product, so we found a fulfilment centre that was willing to do that.”

A few of the key partners that Izba partners with are Amware, IDS, and Mainfreight. Aaron adds, “These are several of our go-to partners when we want industry advice. When we refer clients to them, we know

they will get the attention they deserve.”

As for future plans for the company, Aaron says he is very optimistic. He explains, “Capabl is our focus right now, but we want to continue to see what needs to be done in the start-up ecosystem.

Our goal is to make sure that when our clients and consultants have grown beyond Izba, they are able to stand and thrive on their own two feet. For clients, that means building them a worldclass supply chain team. For consultants, it’s supporting them as they go on to found companies or be VPs of supply chain at fastgrowing companies. We will always be there. We will cheer on their success, even if we do it from afar.”

Aaron concludes by saying he cannot guarantee a start-up will make a lot of money, but he points to his strategy on how everyone can win; “It’s all about our relationships with our brands, consultants, and our network of supply chain vendors that has helped us bring flexibility to supply chain, grow during the pandemic, and bring value to the market.”

For further information, visit www.izba.co 19

BLOCKCHAIN

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The University of British Columbia Okanagan reveals how blockchain technology can boost the efficiency of our supply chains.

IMPROVING SUPPLY CHAIN PERFORMANCE 21

AS CANADA AND THE REST OF THE WORLD STRUGGLE WITH SUPPLY CHAIN ISSUES, THE UNIVERSITY OF BRITISH COLUMBIA OKANAGAN (UBCO) HAS DONE A DEEP DIVE INTO HOW NEW TECHNOLOGY COULD IMPROVE THE SUSTAINABILITY AND PERFORMANCE OF SUPPLY CHAINS, PUBLISHED IN THE INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS. Dr Tosarkani, an assistant professor of Manufacturing Engineering at the UBCO School of Engineering, and doctoral student Samuel Yousefi are behind the study. Dr Tosarkani researches supply chain management, operations management and sustainability. New modelling from his lab suggests that focusing on digital transformation and adopting blockchain technology could reduce shipping bottlenecks and provide a clearer end-to-end picture of how items travel from origin to destination.

On applying blockchain technology to the supply of goods from producer 22

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to consumer, Dr Tosarkani explained, “Most people associate blockchain technology with cryptocurrency, but it can provide a consistent and secure system for tracking financial data and logistics.”

The economic burden of responding to sustainable

MOST PEOPLE ASSOCIATE BLOCKCHAIN TECHNOLOGY WITH CRYPTOCURRENCY, BUT IT CAN PROVIDE A CONSISTENT AND SECURE SYSTEM FOR TRACKING FINANCIAL DATA AND LOGISTICS Dr Tosarkani

development and severe socio-environmental constraints has made a considerable impact on supply chain-related decisions. Being able to increase the integrity, flexibility and monitoring of assets has become a vital issue for sustainable supply chain management. And as

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more people and companies embrace environmentallyfriendly products, there is a need to maintain a transparent and robust tracking system to ensure products are exactly what they claim.

The integration of this technology into the supply chain is still in its infancy, but it is able to provide definite benefits to managers and decision-makers who are ultimately responsible for ensuring supply chains run smoothly. Yousefi said, “Blockchain technology has not been widely applied in this field due to the lack of familiarity. But from both an operational and a sustainability perspective, blockchain provides tools that the supply chain industry can use that will expedite systems and bolster sustainability.”

Yousefi goes on to explain that blockchain simultaneously records the flow of information about all existing processes in a supply chain and automatically shares all that data with other units involved – including the suppliers, manufacturers and retailers – at all stages of a product’s lifecycle.

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BLOCKCHAIN TECHNOLOGY CAN HAVE A PARADIGMSHIFTING IMPACT ON THE SUPPLY CHAIN

BY ADDRESSING THE SUSTAINABILITY CHALLENGES CURRENTLY BEING FACED Dr Tosarkani

Dr Tosarkani added, “Blockchain technology can have a paradigm-shifting impact on the supply chain by addressing the sustainability challenges currently being faced, but also challenges we might come across in the future.”

The researchers are currently connecting with supply chain operators to investigate future applications for the integration of these tools into existing systems and processes.

For further information on UBCO, visit www.ok.ubc.ca Source: www.nsnews.com 27

BUSINESS INTERVIEW

G ACT L 28

GLOBALLY, LOCALLY taci US is an entity part of the Staci Group, experts in logistics for multichannel retail supply chains, with a constant doubledigit growth and super crisis

resilience. Nicolas Morisse is President of Staci USA, since he created this subsidiary in March 2019.

Nicolas explains, “The Staci US story is a bit of

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an ‘American dream’. We wanted to accompany a customer for which we were already distributing their products in France. We had the opportunity to respond to their call for tenders as part of the outsourcing of their logisitics in the United States.

Thanks to our determination, we won this tender.

“The next steps were crazy, with the creation of a subsidiary of Staci in the USA in March 2019, the opening of a warehouse in Jersey City in May 2019, and the setting up of a French-American team to start this project and transfer the activity from the existing warehouse to the new one.

We did it in four months! It was an exciting challenge.

Then everything got out of control with the arrival of two additional large customers, and then covid, which upset our plans a little.”

Even if the volume of orders to prepare remained very high (more than 5,000 orders per day) during the pandemic, the difficulty of recruiting, combined with not being able to go on site, complicated the operational management.

But this did not dampen the 31

morale of the teams. Today, Staci US has more than 150 employees, and nearly 300,000 square feet of warehouses in three states, from east to west. In three years, it has gone from zero to over $20 million in revenue, and its annual growth rate for the next three years is expected to be over 20 per cent (excluding external growth).

Nicolas continues, “Today my role is essentially to focus on North American development, accompanying European customers on the American market because they have confidence in our ability to reproduce the successful models we have set up

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with them in Europe. But also in the other direction, taking new market share and offering our logistical solutions on the other side of the Atlantic.

“We have more than 60 locations worldwide, more than 2,500 employees, and a strong presence in Europe, particularly in France, UK, Spain, Netherlands, Germany, Italy and Belgium.

“We have over seven million square feet of logistics space worldwide.

Here in North America, we have locations in Jersey City (NJ), Memphis (TN), and the last one opened a few months ago in Reno (NV).”

Since entering the North American market in 2019, Staci US has acquired several key clients including LimeLife, Pierre Fabre, Biologique Recherche, Kusmi Tea, and SlickChicks, which is a startup clothing company poised for aggressive growth this year.

Nicolas says, “The Staci Group has a deep international portfolio across many sectors, from automotive and cosmetics, to ecommerce and spare parts, working with such big-name clients as Coca-Cola, Nestlé and Red Bull. We are inviting our overseas clients that do not necessarily have a logistics presence in the US to

“IN THREE YEARS, IT HAS GONE FROM ZERO TO OVER $20 MILLION IN REVENUE, AND ITS ANNUAL GROWTH RATE FOR THE NEXT THREE YEARS IS EXPECTED TO BE OVER 20 PER CENT (EXCLUDING EXTERNAL GROWTH)” come out to our facility and see our network here, equipped to support their growth.”

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Nicolas believes it is Staci Group’s expertise in multichannel B2B, B2C and D2C logistics, as well as ecommerce, that sets the company apart from its competitors. He says, “We have a fully integrated end-to-end logistics platform, from dock to door. Our platform follows the lifeline of a product from

“WHAT WE ARE DOING HERE IN THE US IS FANTASTIC. WE ARE OPENING NEW FACILITIES AND CREATING NEW JOBS IN NORTH AMERICA, WHILE CONTINUING TO SERVE OUR INTERNATIONAL CUSTOMER BASE” inbound, pick and pack, and value-added services, through to transportation, distribution, and reverse logistics. We also integrate with many web shops, ecommerce web stores and marketplaces, and we have a very dynamic warehouse management system, with a team to support it. This makes integration super-simple and super-convenient. It is a global network. Companies can leverage 35

our supply chain network to sharpen their competitive edge.

“We create tailor-made logistics solutions to support international companies, or to help domestic companies looking to go international. For instance, we created a bespoke logistics solution for our client Limelife in Spain, UK, France

“WE CREATE TAILORMADE LOGISTICS SOLUTIONS TO SUPPORT INTERNATIONAL COMPANIES, OR TO HELP DOMESTIC COMPANIES LOOKING TO GO INTERNATIONAL” and Germany, as well as here in the US. Our unique selling proposition separating us from our competitors is this ability to offer bespoke logistics solutions with innovative digital solutions for our clients.”

End-to-end monitoring of the value stream of the company’s logistics solutions provides the visibility, transparency and traceability that today’s clients demand. Nicolas adds, “At 36

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Staci US, we deal with a lot of pharmaceuticals organisations, so it is critically important to have end-to-end traceability of products. You have to be able to monitor expiry dates, batch numbers, and who went through the product, in the unlikely event of a recall or a return.”

As far as Staci Group’s vision for the future is concerned, Nicolas believes it is absolutely crucial to have green initiatives in place.

He says, “The Staci Group has a team exploring green logistics and reducing our carbon footprint through recyclable packaging material, less packaging material, and working with logistics partners on cooperative carbon 38

reduction measures. We are focused on making all our sites smart facilities in order to reduce our energy consumption. In North America, we are looking into renewable energy solutions to augment or supplement our energy use in our facilities.

Motion lighting and automatic temperature controls mean we do not waste energy. We want to lead the way within our industry.”

Staci Group's mantra is think globally, act locally. The goal is to offer practical solutions to customers, so that they have the ability to easily reach customers on the east and west coasts. Meanwhile, the company continues to explore

additional facilities and potential acquisitions across the United States to further its offering in this massive market.

Nicolas explains, “We are fortunate to be supported by one of the largest investment funds in Europe and the world, ARDIAN. This fund manages more than 100 billion dollars.

Thanks to this shareholder, which represents nearly 80 per cent of the company’s capital, along with Société Générale, a major French bank, and some 60 of Staci’s managers, we can pursue our external growth serenely.”

“WHAT'S UNIQUE ABOUT UNLIMITED TECHNOLOGY IS THAT THEY FOLLOW OUR PHILOSOPHY: THINK GLOBALLY BUT ACT LOCALLY” set up Staci US’ IT infrastructure when it launched three years ago. Nicolas adds, “What's unique about Unlimited Technology is that they follow our philosophy: think globally but act locally.”

According to Nicolas, it is impossible to do business without partnering with likeminded companies. He says, “Our green initiatives are extremely important, as is our culture of satisfying our customers and how we treat our employees. We want to partner with like-minded companies because they have a proven track record of doing the right thing for their customers, their employees, and the global environment.”

One such partner working with Staci US is the managed services provider, Unlimited Technology.

This global IT network helped 39

“WE ARE ON A MISSION TO DELIGHT OUR CUSTOMERS AND EMPLOYEES, AND LANDSBERG HELPS US FULFILL THAT MISSION” Staci US is partnering with a company called Landsberg for their packaging materials. Nicolas continues, “Landsberg helps us find renewable and sustainable packaging supplies, as well as reduce our costs and streamline our operations. We are on a mission to delight our customers

and employees, and Landsberg helps us fulfill that mission.”

But what makes Staci US so successful is its team. Nicolas says, “I think first of Nathan Lugo, our COO. Throughout Covid, Nathan led the teams with me remotely, recruited in a totally new period, and managed to structure a reliable and determined team.

“At the end of the year, we had the pleasure of welcoming Johanna Pudda as our General Manager.

She is French, but has been living in the USA for more than 15 years, working with the best and most famous logisticians. Our Sales Director is also Franco-American, coming from freight forwarding, which is very reassuring for our French customers. Thanks to this multicultural and logistically native team, we have fantastic opportunities ahead of us.”

2022 marks a very exciting year for Staci US, with ambitions to expand North American operations and introduce the company’s offerings to new customers. Nicolas concludes, “What we are doing here in the US is fantastic. We are opening new facilities and creating new jobs in North America, while continuing to serve our international customer base.”

Partner with us today!

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For more information, visit www.staci.com

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SOURCING

RIGHT ON TRACK Sourcemap raises $10 million to grow its supply chain software.

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SUPPLY CHAIN SOFTWARE COMPANY SOURCEMAP HAS RECEIVED $10 MILLION IN FUNDING TO EXPAND ITS PLATFORM AIMED AT HELPING BUSINESSES TRACK EVERYTHING FROM RAW MATERIAL SOURCING TO CARBON EMISSIONS THROUGHOUT THEIR OPERATIONS. he series A funding round was led by Energize Ventures, an investment management firm focused on digital transformation in energy and sustainability, with participation from E14 Fund.

The funding will help Sourcemap grow its North American operations and expand with a European subsidiary. The growth comes as the demand for supply chain traceability and risk management increases, and the technology to improve that efficiency becomes more readily available.

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Leo Bonanni, CEO of Sourcemap, said, “We were the first company to commercialise software for supply chain mapping, which is a process whereby brands and manufacturers go beyond their direct suppliers and find out where their raw materials come from. If there’s any hiccup anywhere around the world that could impact them, like the current crisis in Ukraine, they could act very quickly to make sure their suppliers are OK and to find alternative ways to get their goods to market.”

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Supply chain technology companies raised more than $24.3 billion in funding through the first three quarters of 2021, according to PitchBook. AI-software provider o9, which helps predict supply chain risks, recently received a $295 million investment in its platform as another example of the growth. Research and Markets estimates the supply

SUPPLY CHAIN MAPPING HAS BECOME AN ESSENTIAL TOOL FOR COMPETITIVENESS AND COMPLIANCE ACROSS THE GLOBAL ECONOMY chain risk management software market will reach $1.95 billion by 2027.

Sourcemap says it has more than 400,000 businesses registered on its platform, across industries such as food and agriculture, apparel, pharmaceuticals, and automotive, claiming to be the world’s largest supply 46

chain due diligence network.

The company has helped businesses with responsible sourcing on more than 60 billion dollars of purchasing spend.

Providing end-to-end supply chain due diligence, the platform assists with supply chain risk, traceability and resilience planning, with upto-date data and real-time information. Sourcemap says its data and analytics have been used to drive companies around the world to meet critical environmental, social and governance targets (ESG).

Bonanni added, “Supply chain mapping has become an essential tool for competitiveness and compliance across the global economy. We are thrilled to partner with Energize Ventures and E14 Fund to bring the Sourcemap solution to more companies around the world as we continue to empower a more sustainable, resilient and compliant global supply chain.”

Whilst plenty of focus has been placed on the impact of geopolitical uncertainty on the direct supply chain 47

DATA IS A TOOL FOR MEANINGF NEED AUDITABLE DATA TO E in areas like shipping, freight and last mile, not enough emphasis is being placed on the very beginning of the supply chain, on the sourcing of parts and raw materials. According to Bonanni, this is where the biggest risks lie.

Juan Muldoon, partner at Energize Ventures, explained, “As supply chain disruptions challenge core operations 48

for businesses across nearly all sectors of the global economy, companies are looking for solutions that can provide better visibility into every link in the chain. At Energize, we are especially attuned to the importance of supply chain resiliency in the buildout of new energy infrastructure, and we’re excited to help bring Sourcemap’s leading supply chain due diligence software to more

companies shaping the future of sustainability.”

Calvin Chin, managing partner at E14 Fund, added, “Data is a tool for meaningful change, and companies need auditable data to effectively mitigate risk. Sourcemap's customers understand the value of making critical supply chain decisions based on comprehensive and verifiable

data that only Sourcemap can provide. At E14 Fund, we invest in companies that have differentiated deep technologies that have real world impact.

We're excited to continue the journey with Sourcemap as datadriven decision-making becomes ubiquitous.”

For further information on Sourcemap, visit www.sourcemap.com

Source: www.environmentalleader.com

FUL CHANGE, AND COMPANIES EFFECTIVELY MITIGATE RISK

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BUSINESS INTERVIEW

ENHANCING CUSTOMER EXPERIENCE AND SUPPLY CHAIN COMPETITIVENESS Danny Berry, VP Hewlett Packard Enterprise, discusses the critical role of digital technologies.

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DANNY BERRY SERVES AS VICE PRESIDENT OF SUPPLY CHAIN WITHIN THE TECHNOLOGY SERVICES UNIT FOR HEWLETT PACKARD ENTERPRISE, BRANDED AS HPE POINTNEXT SERVICES. THE SUPPLY CHAIN ORGANISATION CONSISTS OF THREE INTEGRATED TEAMS.

anny begins, “The first team is responsible for getting spare parts to our enterprise customers, this is the backbone of the organisation. Here the goal is to get the right part to the right place at the right time with the right quality and cost.

It’s simple to describe – it’s not simple to do! Our customers include 90 per cent of the Fortune 500, and HPE has built one-third of the Top 100 fastest supercomputers in the world – so part availability and speed are vital to serve our customers’ needs.

Following a diagnosis, we may need to have a part

at site or get it to site in a few hours, depending on contract levels. The interplay between our technical support centres, supply chain, and our field engineers needs to be frictionless. We are with our customers in their hour of need, 24×7×365, shipping parts to more than 170 countries.

That is our value proposition – our responsiveness, our ability to get things fixed, the assurance we can offer our customers.”

The second team is a sales operation, selling HPE genuine authorised parts to customers who do not have active support contracts or have 53

out-of-warranty products. Danny explains, “Cybersecurity is a big concern to many enterprise customers. You only have to read the news. Counterfeit parts or malware risks can lead to catastrophic consequences, security breaches, ransomware, data loss. Data is one of the most crucial assets a company has – so why risk it with bad quality parts?”

“CUSTOMERS ARE ALWAYS OUR #1 FOCUS AREA. ENSURING WE ARE DOING THE DAY JOB WELL TO GIVE GREAT CUSTOMER EXPERIENCE IS ALWAYS OUR PRIMARY CONCERN” The third and final part of this services supply chain is the Integration Services team, otherwise known as Factory Express Services. Danny explains, “We have Supply Chain team members embedded in our product factories across the globe. Customers have needs all along the spectrum, from simple asset tagging at one 54

end, right through to integrating a range of servers, storage and networking devices into a complete customer-ready solution – a turnkey solution involving complex hardware and software, ready to switch on fast and gain productivity. The team can enable a lot of customisation in a short amount of time, almost like the customer having their own factory.”

Many HPE Pointnext Services customers are undergoing massive digital transformations, leveraging the expertise the services organisation within HPE brings. Similarly, the supply chain team is in a constant state of evolution, driving customer centricity and identifying smart digital deployments.

“We base our strategy and plans around five focus areas,” explains Danny.

“Customers are always our #1 focus area. Ensuring we are doing the day job well to give great customer experience is always our primary concern.”

The next focus area is Optimisation. Danny continues, “As operations or supply chain professionals, we are always looking for the best balance point between a whole range of things like speed of 55

response, inventory investments, transportation, warehousing, costs and more.

“The third focus area are supply chain spaces where we want to Innovate & Transform. We examine our business, asking ourselves: ‘Will this improve a customer’s experience? Does this make a team member’s job easier? Does it help us improve a key metric?’ If it doesn’t pass 56

these types of test questions, it does not get done. As business leaders, we have all seen pretty slides that change nothing. None of the leaders I speak to across the industry have time for innovation for the sake of innovation – it has got to make a real difference.

This balance between ongoing optimising and transforming is tough – performing and transforming at the same time is always a challenge.

“Next comes our Big Picture focus area. In simple terms, that means hooking into and supporting the big strategic plays at an HPE Pointnext Services level and at an HPE level. It’s important that busy people in big organisations don’t work in a bubble – so getting very clear on the spaces where we need to support the big picture is important.

“And our final focus area is People & Culture. It’s our people who

develop strategies, drive the projects and change programmes, run the daily processes, come up with the smart ideas – our people are the foundation of everything we do.”

A key area of focus for optimisation in recent times has been part returns. Every time a part is replaced, the Supply Chain organisation works to recover the failed part.

With millions of customer contracts to support globally, this is no 57

“WE NEEDED TO OPTIMISE THE PART RETURNS SITUATION ON MANY LEVELS. WE ALSO FELT IT WAS AN AREA RIPE FOR A DIGITAL TRANSFORMATION AND INNOVATION PARTNERSHIP” 58

easy task. The Supply Chain network consists of hundreds of technology manufacturers and logistics partners around the world. Parts are planned and positioned in more than a thousand stocking locations globally, including regional distribution centres, country hubs, field stocking locations, as well as ‘smart spares boxes’, which are secure customerdedicated lockers directly on a customer’s site.

The team felt there was strong potential to improve the part returns space, as explained by Danny, “We were spending a lot of time continually optimising our forward supply chain. This is natural when you have a customer event – a sometimes critical situation you have to design for – but we had simply spent less time on the reverse supply chain part returns. We analysed our varied customer landscape and the wide variety of approaches in recovering parts that it created. We needed to optimise the part returns situation on many levels. We also felt it was an area ripe for a digital transformation and innovation partnership.”

Says Oliver Lemanski, CEO of OnProcess, “We began 59

“IT’S OUR PEOPLE WHO DEVELOP STRATEGIES, DRIVE THE PROJECTS AND CHANGE PROGRAMMES, RUN THE DAILY PROCESSES, COME UP WITH THE SMART IDEAS – OUR PEOPLE ARE THE FOUNDATION OF EVERYTHING WE DO”

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discussing reverse supply chain processes with HPE back in 2020. HPE wanted to apply a consistent global approach and to dramatically improve effectiveness. But it wasn’t just the case of chasing their customers and getting any part back – they needed intelligent, informed decisions based on real-time information. We worked together to get a much clearer insight into customers’ behaviour and tuned approaches based on these insights. Now one year on, around 97 per cent of HPE’s service part returns are handled automatically using our technology. Even though 2020 was probably not the best 62

year to launch a programme on such a global scale, HPE and OnProcess decided it could still be done; and, frankly, we proved it.”

Danny adds, “In simple terms, this is about delivering a superior customer experience and better sustainability. Global standard approaches, things like standard self-service portals allowing returns declaration, arranging pick-up, and printing shipping labels, are particularly important for global customers. We capture important returned part data right at source – for example, on mobile apps on field engineers’ phones – to analyse the data and drive better

decision making. There’s no point in transporting parts around the world, increasing carbon footprints, if we end up having to scrap it. We analyse data to understand if we should be doing ethical e-scrapping locally. We can also work with part vendors more effectively to determine the right course of action on defective parts that are in warranty. In parallel, we can work with repair partners more effectively regarding the repair and re-use parts that are out of warranty – this is our circular economy in action. We are proud of our efforts in sustainability across HPE, and this work is another step in the right direction.”

Digital innovation is changing customer experience in other spaces, across Supply Chain and HPE Pointnext Services. Traditionally, if a customer needed technical support, they would phone a support centre for a remote diagnosis, a part would be ordered as required, and an engineer sent to make the fix. HPE Pointnext Services are midway through an extensive Digital Customer Experience (DCE) programme with key service functions engaged including Supply Chain.

Central to DCE is a single sign-on customer personalised portal. This workspace captures a broad range of customer information including 63

The circular supply chain

Powering the world’s circular service supply chains The principles of traditional manufacturing supply chains that have served us for decades are now being seriously questioned. The ‘makeuse-discard’ model - where we extract the earth’s resources to make and build products that are shipped around the world before being used, then thrown away after we have finished with them - is now seen as a wasteful and unsustainable approach that does nothing for the world’s resources and contributes to dangerous greenhouse gas emissions.

An alternative model based on what is called the Circular Economy focuses instead on designing products and their underlying components to be easily serviceable, and retained within their own supply chains by recovering them for refurbishment, reassembly and re-sale. The processes involved in these service events – in particular around the logistics of parts - is known as the service supply chain and is now seen as critical in driving sustainable practices and closing the loop on circularity.

But it is not just environmental reasons that are driving this move to more circular service supply chains. There is often huge value left within parts and products in the field, recovering that value can add millions to a business’s bottom line. In addition, the challenges in global logistics and the scarcity of materials and parts have made businesses re-think how they build resilience into their supply chains; and recovery of unused products and parts could just be the way to do it.

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A critical part of implementing a circular the processes used to recover products parts. It is often assumed that the expen would be prohibitive. Not so. Once proce payback can be immense. The cost of re materials is often substantially lower tha risk and volatile price variations are cont environmental targets can become muc

But it is not just about Recovery. Smarte supply chains focus around three main f

n

r service supply chain are s, materials, and service nse involved in this recovery esses are in place, the e-using recovered parts and an procuring new, supplier tained, and of course ch easier to attain.

er more dynamic service functions:

1

2

3

Plan

Deliver

Recover

which ensures service parts and inventory are available and in the right place to meet any relevant service level agreements

which ensures those service parts are delivered to customers according to those SLAs

which ensures as much value is recovered from parts used in the service event

Historically these functions have operated almost independently. The circular service supply chain however, links them together such that Delivery information informs returns and recovery schedules, recovery data provides real-time input into future planning cycles, deliveries inform planning processes on inventory and service needs, and so on. Importantly all of this should happen with those service-levels, or rather the service experience of the end-customer put right at the heart of the processes.

All sounds great, but the challenge is less about whether to implement a more circular approach to service supply chains but rather how to do it ….

The solution is digital and it starts with data It may sound obvious but knowing who and where your customers are and importantly what products they have and where they might be, is crucial if good after-sales service is desired. If that information is not easily available, wrong parts can end up in the wrong places, parts can be shipped when none were necessary, and failure warranties can remain unclaimed. Getting that information means starting with underlying data. The problem is that the data is almost always spread across disconnected systems and data siloes.

That’s why a smart solution to this starts with addressing the data problem first. A technology platform that connects those different systems and data streams into a unified form allows insight and intelligence to be extracted and the Plan-Deliver-Recover cycle to operate in a frictionless way. And such a technology platform would also facilitate new digital-first approaches to process execution such as customer self-service portals and apps, dynamic routing and returns logistics of parts based on new metrics such as environmental impact or customer experience – welcome to a new service era.

To find out more about OnProcess and the OnProcess Agora™ platform please visit www.onprocess.com

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“EVEN THOUGH 2020 WAS PROBABLY NOT THE BEST YEAR TO LAUNCH A PROGRAMME ON SUCH A GLOBAL SCALE, HPE AND ONPROCESS DECIDED IT COULD STILL BE DONE; AND, FRANKLY, WE PROVED IT” Oliver Lemanski, CEO of OnProcess

products, contracts, support cases, engineer visits, and real-time status on the environmental health of the customer’s IT infrastructure, providing feedback and proactive guidance helping them to avoid issues. Intelligent search capabilities guide customers to digital and video knowledge on demand for self-serve enquiries and troubleshooting. Customers can create cases and utilise AIenabled virtual engineers to assist in solving technical issues, or be connected to live engineers in a seamless manner.

“We are currently building supply chain capabilities into the DCE workspace to allow customers to order and track parts following an AI-guided problem diagnosis,” notes Danny. “We will then merge 66

Typical service supply chains are a web of disconnected, manual processes managed by siloed departments and systems. Information is difficult to share, inefficiency is rife, and precision is hard to deliver.

OnProcess Agora™ That’s why OnProcess developed OnProcess Agora Recover™, a cloudbased asset recovery solution that offers easeof-use, with self-service applications linked to a powerful network of data and analytics.

Built on the OnProcess Agora™ software platform, Agora Recover optimizes the asset recovery process - facilitating, tracking and expediting the return of assets and service parts from the field. In turn, this helps to dramatically reduce costs, increase revenue streams while improving customer experience, all while feeding those parts back into the value chain for increased sustainability.

Delivered as a fully managed business service, OnProcess Agora and Agora Recover are used by some of the world’s most recognized technology brands to drive new levels of service into their after-sales supply chains.

To find out more please visit www.onprocess.com 67

“THE DIGITAL CUSTOMER EXPERIENCE PROG REDEFINING HOW WE WORK WITH CUSTOME US WAY BEYOND A TRADITIONAL BREAK-FIX MODEL THAT IS PREVALENT IN THE INDUST 68

GRAMME IS ERS, MOVING X, REACTIVE TRY”

in our returns and part sales portal capabilities, to provide a one-stop shop for Supply Chain needs in the DCE workspace. The Digital Customer Experience programme is redefining how we work with customers, moving us way beyond a traditional break-fix, reactive model that is prevalent in the industry. As we migrate customers onto this platform, it is giving them a better customer experience.

They are getting answers faster and it gives them more control. We are working to migrate our entire customer base. DCE engages customers to allow them to get more from their IT investments and enable better business outcomes for them.”

Inside the HPE Pointnext Services Supply Chain organisation, Transformation activities are being driven in a broad range of areas – some traditional, some with a more digital flavour. Danny explains, “The digital technologies talked about in Industry 4.0 offer fantastic opportunities, but they are not the cure all or a silver bullet for all situations. It’s always a blend. Some of our current work in the supply chain process space is a good example.”

The organisation is currently engaged in an end-to-end assessment of all day-to-day activities and processes using lean methodologies. All team 69

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members have broad based training in lean principles and are encouraged to move through yellow, green and black belt levels and lead kaizen-type process improvement projects.

Danny explains, “We are constantly driving our processes through a ‘standardise and simplify’ improvement cycle. We are also identifying opportunities for process automation. My Supply Chain organisation was a bit behind the curve on things like robotic process automation (RPA) – but we decided to jumpstart this by re-orientating a Supply Chain team with good core analytical skills. We are now progressing very quickly and using the capacity we generate to do more valueadd work. The last part of the process assessment work is the classic Do-versus-Buy question, continually assessing our process landscape to find possible candidates for outsourcing – so it’s always a blend of traditional and digital.”

Artificial intelligence is not just creating better experiences at the customer interface, it is being further integrated into Danny’s organisation. He and his team are engaged in an internal partnership with HPE AI data scientists and consultants. They have developed an ongoing programme of AI projects that

is focused on tackling a range of supply chain challenges. The goal is to make their supply chain more effective, but also to show customers how AI is being deployed in action – proof points and use cases to educate and inform customers.

Danny shares a simple example; “Supply chain professionals are swimming, sometimes drowning in a sea of data. It becomes a problem when that sea is polluted with bad quality data. Take Bills of Materials (BoM’s) for example. These are the product recipe lists we use in manufacturing and supply chain environments. The basis of most materials planning is a BoM multiplied or exploded by a forecast of some sort. Typically, BoM data is entered manually into IT systems, which is a process prone to mistakes. You don’t tend to see problems until after the fact, things like missing parts. We’ve partnered with HPE AI experts and have utilised AI algorithms to identify potential issues in our BoM database.

We have an enormous amount of BoM’s, we are supporting customers with parts for many years after products have stopped being manufactured, and we can use AI to correct issues in a much more efficient, almost surgical way. That is simply not possible using 71

“DRIVING DIVERSITY, EQUITY AND INCLUSION IS NOT A PASSING TREND FOR US, IT’S A BUSINESS ESSENTIAL, SIMPLE AS THAT”

manual approaches. If you then take a step back and generalise the problem of bad quality data at an industry level, how much data we have now and growing exponentially, AI is going to be the only way we are going to be able to get a handle on these types of problems.

“We are using AI to help us cleanse data like BoM’s and Contracts, but also using AI to improve and monitor key processes like part forecasting and part ordering, as well as drive supply chain network design improvements.

It’s exciting times in terms of digital 72

innovation, but it’s all based on a foundation of smart people.”

The conversation returns to the fifth and final key focus area in the HPE Pointnext Services Supply Chain strategy, People and Culture.

Danny explains, “We encourage our team members to really own their careers, take some risks along the way with different jobs or rotational opportunities, and really adopt a ‘develop by doing’ approach. We have development programmes to support our team members at different stages of their careers

including interns, early career, and top talent. Our programmes typically consist of skills-based training, mentoring with leaders across the organisation, and teambased projects. We have good gender balance in our team, from early career to our mid-range job scopes, but thereafter, we identified something of a ‘broken rung’.

Supply Chain launched a female development programme to help ‘rebuild the ladder.’ We are currently in our second year of this successful programme, now seeing our female team members securing some

great new jobs and promotional opportunities – it’s inspiring to see this talent mobility. We are driving hard in the whole area of diversity, equity and inclusion (DEI). We have an active Supply Chain DEI council, with team member representatives from across our organisation. The council provides guidance and feedback, and drives trainings and actions at a grass roots level. Our Supply Chain organisation is comprised of a diverse employee base across 50 countries, many of whom are working from home. Driving 73

“CLOUD IS AN EXPERIENCE, NOT A DESTINATION. SUPPLY CHAIN CAPABILITIES RIGHT ACROSS ALL AREAS OF HPE WILL CONTINUE TO BE A CRITICAL ENABLER AND DIFFERENTIATOR ACROSS OUR ENTIRE PORTFOLIO OF HPE GREENLAKE CLOUD SERVICES”

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diversity, equity and inclusion is not a passing trend for us, it’s a business essential, simple as that.”

As for the future, Danny says Transformation is going on across all areas of HPE Pointnext Services and HPE. He explains, “There’s a major consideration going on in just about every company around digital transformation, but the degree of success and speed varies considerably. Companies are also in a massive dilemma regarding the cloud – should they stay in their onpremise IT infrastructure, or should they move their compute and storage needs to the public cloud? Bottomline, customers want the flexibility of cloud, but are concerned about security and losing control of their data. HPE is transitioning, bringing the cloud experience across all applications and data, from edge to cloud. During 2022, the entire HPE portfolio will be made available as a service through a range of subscription and pay-peruse offerings. Customers will get the financial scaling and flexibility they want, retain control, and enhanced security. Cloud is an experience, not a destination. Supply chain capabilities right across all areas of HPE will continue to be a critical enabler and differentiator across our entire portfolio of HPE GreenLake cloud services. We really are in very exciting times.”

For further information, visit www.hpe.com 75

C L I M AT E C H A N G E

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The US Department of Energy has set out its plans to secure a more sustainable energy supply chain.

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THE US DEPARTMENT OF ENERGY (DOE) RECENTLY COMPLETED A REPORT ENTITLED ‘AMERICA’S STRATEGY TO SECURE THE SUPPLY CHAIN FOR A ROBUST CLEAN ENERGY TRANSITION’ ON WHAT IT WILL TAKE TO SECURE THE SUPPLY CHAINS NECESSARY TO SUPPORT THE NATION’S CLEAN ENERGY GOALS. he ultimate objectives are: i) to achieve diverse and resilient supply chains that will (ii) meet climate change goals, (iii) establish the US as a leader in clean energy innovation and manufacturing, and (iv) create jobs in the clean energy economy.

For nuclear, DOE's goals are to enable continued operation of existing US nuclear reactors, enable deployment of advanced nuclear reactors, develop advanced nuclear fuel cycles, and maintain US leadership in nuclear energy technology.

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According to DOE, this is the US government's first-ever comprehensive strategy to build a secure, resilient, and diverse domestic energy sector industrial base, and is part of a whole of government approach to revitalising the US economy and manufacturing by securing the country's most critical supply chains.

Secretary of Energy Jennifer Granholm said, “Taking bold action to invest in our supply chains means America will reap the tremendous opportunities that tackling climate change presents to kickstart domestic manufacturing and help secure our national, economic, and energy security.

"The strength of a nation relies on resilient and reliable critical supply chains across sectors, and DOE's report provides the key strategies and recommendations for congress and the federal government to act now to help deliver more jobs and a stronger, cleaner future.”

The report is informed by 13 deep-dive assessments on specific technologies and 79

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crosscutting topics, and focuses on key findings that will maximise opportunities to strengthen the energy supply chain and develop the country's energy manufacturing base and workforce.

“NUCLEAR ENERGY ALSO PROVIDES MORE LOCAL PERMANENT JOBS, AND AT HIGHER AVERAGE WAGE, THAN OTHER ENERGY SOURCES, THE DEEP-DIVE REPORT NOTES” The nuclear supply chain is critical for successfully enabling the continued operation of the US’ existing fleet of light-water reactors, as well as supporting the deployment of advanced nuclear technologies, which can provide low-carbon heat and/or electricity for facilities and processes outside the power sector, alongside other clean energy options for deep decarbonisation. Nuclear energy also provides more local 81

permanent jobs, and at higher average wage, than other energy sources, the deep-dive report notes.

It states, “Although there are challenges and risks in each of these areas, implementation of targeted policies would support achievement of all the goals and would strengthen the US nuclear supply chain to meet the nation's 82

energy, environmental, and societal needs.”

Focusing on the need to deploy advanced reactors, in the near term, the main priorities for this to take place are the establishment of a secure domestic supply of the high-assay low-enriched uranium (HALEU) fuel that such reactors will need, and the demonstration of ‘innovative’ reactor designs

under the Advanced Reactor Demonstration Program (ARDP), many of which require TRISO fuel and uranium metal fuel.

None of these fuels is as yet commercially available.

The overarching strategy document includes in its recommendations developing an integrated waste disposal strategy for used fuel, with an

“IMPLEMENTATION OF TARGETED POLICIES WOULD SUPPORT ACHIEVEMENT OF ALL THE GOALS AND WOULD STRENGTHEN THE US NUCLEAR SUPPLY CHAIN TO MEET THE NATION'S ENERGY, ENVIRONMENTAL, AND SOCIETAL NEEDS” 83

initial focus on a consentbased siting process for the siting of federal facilities for temporary, consolidated storage; and coordinating with the US Nuclear Regulatory Commission to support deployment of advanced nuclear reactors in a timely manner. It calls for congressional action to amend the Nuclear Waste Policy Act and to support funding to agencies for the development and accelerated deployment of innovative nuclear energy systems.

It is not a criticism of the report to say that these documents contain few startling new insights into what is needed. Rather, DOE provides a thorough survey and compilation of all the many actions and institutions that need to come together to achieve reliable supply chains to enable the transition to a clean energy economy.

To read the report in full, visit www.energy.gov www.world-nuclear-news.org

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THIRD EDITION

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WHERE DIGITALISATION

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Hapag-Lloyd’s Director of Procurement Excellence, Julia Finning, and Head of Procurement, Daniel Braune, discuss the role of digitalisation in striving for the industry-leading procurement function

industry-leading procurement function discuss the role of digitalisation in striving for the Julia Finning, and Head of Procurement, Daniel Braune, Hapag-Lloyd’s Director of Procurement Excellence,

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COVER STORY

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WHERE DIGITALISATION MEETS SUSTAINABILITY Hapag-Lloyd’s Head of Procurement, Daniel Braune, and Director of Procurement Excellence, Julia Finning, discuss the role of digitalisation in striving for the industry-leading procurement function.

apag-Lloyd is a worldleading liner shipping company, with around 13,900 employees and 418 offices in 137 countries. Headquartered in Hamburg, Germany, Daniel Braune is Head of Procurement and Julia Finning is Director of Procurement Excellence.

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“Professional Supplier Management is of utmost importance for our ambition of being the #1 for Quality in the industry” Daniel Braune, Head of Procurement

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Watch Hapag-Lloyd's corporate film

What Daniel believes makes procurement at Hapag-Lloyd unique is that it has a feel of being a start-up company within Hapag-Lloyd. He says, “We have driven so many changes during my five years at Hapag-Lloyd and yet we still have so much ahead of us, so it has the feel of a startup.”

How does Global Procurement contribute to Hapag-Lloyd’s overall strategy? Daniel says you must first consider what quality means for a shipping line. He continues, “Supplier reliability has a massive influence on our Quality Promises.”

Daniel talks about two types of business within Hapag-Lloyd – merchant haulage business (port to port) and carrier haulage business (door to door). The latter involves a large network of suppliers, and all of these need to be managed. Daniel explains, “It could be that our vessel is punctual, but we cannot rely on our truckers to be on time in a certain country. The entire supply chain from customer to destination involves a number of different suppliers that all need to function and be extremely transparent. This is where supplier management plays a huge role.”

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Julia and her team started to reassess all supplier management related activities on a global scale back in 2020, and planned carefully for a new blueprint.

Considering state-of-the-art approaches and incorporating them into a comprehensive whole, the entire supplier lifecycle systematic was set up to gain sustainable achievements and full transparency along the supply chain.

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She explains, “When onboarding suppliers, you want to have transparency of the basic data, the security that they comply with your rules and standards, and, of course, the code of conduct. Then the journey of supplier relationship management usually begins. To achieve a clear 360-degree view of our suppliers, we also continually keep track of them to ensure we are working with highly qualified suppliers, which match our high

quality requirements and targets.

We diagnose what has gone wrong in the past and identify the issues that we might face going forward.

Of course, we are running supplier benchmarking exercises across our organisation as well. However, we need real-time updates to rate

their performance. An annual performance score is not sufficient anymore.”

Daniel adds that the sheer complexity of a supply chain, or tender involving many cost factors such as performance and risk,

“Sustainability is in the genes of the company. For us, it means more than just complying with the law”

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Learn more at enterprise.craft.co

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makes it very difficult to manage.

You need the right digital tools to have a 360-degree total cost approach, especially when it comes to quality. Daniel says, “If you want to go from A to B with a 360-degree approach, you have to master many different factors, which is difficult. With risk, for example, we have been working on a complete risk management system because a container can be worth millions of dollars. The last thing we want is one of our transport suppliers to go bankrupt.

hence human rights have always been a very important topic for Hapag-Lloyd, but we are still working on our risk analysis and documentation obligations involving a cross-functional approach with our compliance and sustainability colleagues. In terms of risk analysis (incl. red flag screenings and 360-degree scorings, prevention measures, and corrective actions), we are currently deciding on the right digitisation approach to comply with this legislation in the future.”

“At Hapag-Lloyd Procurement, we pursue a start-up culture. The agile way of working helps us to implement good ideas straightforwardly, rather than just talking about them” Julia Finning, Director of Procurement Excellence

The consequences arising out of bankruptcy are disrupted supply chains and retained containers with our customers’ goods. You do not want to be liable for that risk.”

The German government plans to introduce the Supply Chain Due Diligence Act, effective from January 1st, 2023, towards which Daniel, Julia and their teams have been working hard. Julia says, “We are, in general, very well prepared for the future requirements, 96

Daniel says sustainability is a big part of the Supply Chain Due Diligence Act, but the company is not just taking action as a result of these new rules. He adds, “Sustainability is in the genes of the company. For us, it means more than just complying with the law. We want to have the right suppliers in place in order to reach our ambitious goals. The shipping industry has massive improvement potentials in terms of sustainability, and I think we are on the right

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track. It is what the customer wants.”

Digitalisation in procurement is playing a key role in enabling Hapag-Lloyd to fulfil not only new legal requirements, partnering with Craft to gain full supplier transparency. Julia explains, “When we started the supplier management journey, we asked how we can bring more transparency into our supply chain. There are plenty of tools on the market, but we chose Craft because it provides an easy-touse supplier intelligence portal.

In procurement, you want to know as much as possible about your business partners. The tool gives full profiles of our suppliers, with daily alerts, and it is always learning what is important for us as a company. The alerts are categorised by topic and are both positive and negative, pulling everything from newspaper articles to social media posts, to provide us with all the information we need.

This gives us quantitative, objective KPIs for each of the suppliers to ensure that there is no bias in the ratings.”

Daniel adds, “We want to choose partners that fit not only with our requirements, but also with the ethos of Hapag-Lloyd. Craft showed huge experience in

“At Hapag-Lloyd, we have a productcentric IT organisation and an agile product development approach, therefore we prefer partners which comply with our way of working.

This is made possible

by Craft” growing as a company and in developing their functionality. We have been very happy to work with them, helping to develop their tool even further.”

Julia believes it is essential to be able to develop any tool in this way.

She continues, “It is a lot about continuous development. Once you use the tool, you might discover that further enhancements are necessary. At Hapag-Lloyd, we have a product-centric IT organisation and an agile product development approach, therefore we prefer partners which comply with our way of working. This is made possible by Craft. And if further enhancements make sense 99

to us, they will make sense to other customers as well. There are promising possibilities to develop this tool in the future and prepare for potential challenges.”

The Covid-19 pandemic was one such challenge that shook the entire supply chain industry.

Daniel remembers, “We saw huge disruption of supply chains around the world. We underwent many challenges, from shortages and huge demand, to extremely long waiting times of vessels outside the ports. We could not predict something like this would happen, but we were able to tackle the challenges by having improved the 100

visibility and transparency of our supply chain.”

Daniel feels that being agile has been one of the keys to HapagLloyd’s success. He continues, “As a company, being extremely agile is of utmost importance. Before Covid, the next days were a bit more predictable. Then the entire market turned around. Volumes were shrinking at the start of the pandemic, then six months later, it turned around 180 degrees. We faced huge demand and supply challenges everywhere in the world.

So, in two or three years, we have seen three completely different markets. A tender strategy you did

“We have started so many projects. One direction in which we are heading is e-procurement on both the operational and strategic side. We dream of one complete, automatic solution, connected to the different systems in place” Daniel Braune, Head of Procurement

a year ago will not work anymore.

The pandemic has shown us that we need to be extremely agile.”

As for Hapag-Lloyd’s digital roadmap for the future, where to begin? Daniel says, “We have started so many projects. One direction in which we are heading is e-procurement on both the operational and strategic side. We dream of one complete, automatic solution, connected to the different systems in place. In addition, we are talking about the advancement of technologies to prepare tenders, dashboards, linear performance forecasting etc. There is no complete solution out there.”

Julia adds, “At Hapag-Lloyd Procurement, we pursue a startup culture. The agile way of working helps us to implement good ideas straightforwardly, rather than just talking about them. Even when problems arise, we can always cope with them at short notice. Take, for example, our procurement suite that is causing challenges when it comes

to handling our massive amount of data. Logistics tenders are unique, or rather highly complex, especially when it comes to the analysis of possible awarding scenarios. The moment we recognised that we won’t achieve sufficient results with our current tool, we were able to adjust, and started a proof of concept to test an alternative application. The speed of implementation and good collaboration with our IT colleagues are our key to success.

We will definitely benefit from that for our future procurement applications.”

The sustainability topic has huge relevance in ensuring the company is doing the right thing for the future. Daniel concludes, “We really want to take positive steps to help the environment. Decarbonisation is one of our main targets in the years to come. We believe in it, and we are all super-motivated to be working on it.”

For further information, visit www.hapag-lloyd.com 101

S U P P LY C H A I N

AROUND THE CLOCK The public and private sectors are looking for ways to add velocity to cargo flows in the US by shifting to 24/7 supply chains.

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An import surge throughout the pandemic laid bare the structural issues that have plagued businesses transporting products into and across the US for years.

While under the spotlight, ports have engaged with dozens of stakeholders to try to improve operations, resulting in a series of commitments from the private sector, as well as regulatory tweaks.

The White House laid out plans for 24/7 operations to help alleviate snarled supply chains, speeding up the delivery of goods in the US. The initiative focused on the Ports of Los Angeles and Long Beach – where ships sit at anchor for days or even weeks waiting to enter the port for cargo unloading – but may also include some of the nation’s largest transportation and logistics providers. Together, the Ports of Los Angeles and Long

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Beach handle 40 per cent of containerised imports entering the country.

In a recent briefing, President Biden said it took weeks of negotiation with a union, retailers and freight movers to get the ports to begin operating 24 hours a day, seven days a week. He said, “This is the first key step toward(s) moving our entire freight transportation and logistical supply chain, nationwide, to a 24/7 system.”

Usually open during the week and then closed at nights and on weekends, these two important ports are now open more than 60 additional hours every week. This will nearly double the amount of time that the port is usually open during more ‘normal’ operating circumstances.

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“The night hours are critical for increasing the movement of goods because highways are less crowded at night. In fact, during off-peak hours in Los Angeles, cargo leaves the port at a 25 per cent faster pace than during the day shift” P R ES I D E N T B I D E N 106

Biden added, “The night hours are critical for increasing the movement of goods because highways are less crowded at night. In fact, during off-peak hours in Los Angeles, cargo leaves the port at a 25 per cent faster pace than during the day shift.”

To create a truly 24/7 supply chain that helps alleviate or at least relieve the current supply chain snarls, Biden is also calling on large retailers and transportation companies to rethink the way they hire trucks and railcars to move their goods. He said Walmart has committed to moving products 24/7 from ports to its stores across the nation, and that the large retailer is upping its use of off-peak hours by 50 per cent in the coming weeks.

Target, Home Depot and Samsung have committed to ramping up their activities to utilise more off-peak hours at the nation’s ports. FedEx and UPS are also onboard with the idea, having said they will significantly increase the amount of goods they move at night, and with the goal of getting goods onto store shelves faster. Combined, these

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two carriers move about 40 per cent of the nation’s packages.

Biden characterises this willingness to ramp up operations to ease supply chain shortages as a positive move. He said, “This is a big first step in speeding up the movement of materials and goods through our supply chain.”

The Port of Los Angeles has already made progress since adopting 108

the around-the-clock supply chain strategy. On implementation, the port’s executive director said, “We had 25 per cent of all cargo on our dock sitting here for 13 days or longer and that’s been cut in just about half over the last week.”

The hope is that these results will energise more private companies that drive the goods movement chain. This is not something that will happen overnight, but the

“This is a big first step in speeding up the movement of materials and goods through our supply chain” P R ES I D E N T B I D E N

actions being taken by every link in the chain are making a difference by clearing the backlogs and breaking down the barriers that have made it hard to move the unprecedented volume of goods.

By focusing on building the resilience of the nation’s supply chain, with a movement chain that is more fluid and can operate at a higher velocity, fundamental changes can be made, bringing

workers and businesses together to confront the challenges brought on by the pandemic. By tackling the bottlenecks and supply chain inefficiencies, goods can be distributed quicker to the families and businesses that need them.

This, in turn, will work towards helping the economy recover from what has been a challenging couple of years.

Source: www.sourcetoday.com 109

B U S I N E S S I N T E RV I E W

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THE FUTURE OF SUPPLY CHAINS:

FULL REAL-TIME VISIBILITY We talk supply chain strategy with the former VP of Global Supply Chain and Operations at Spring, Patricia Ahufinger.

atricia Ahufinger has worked in supply chain for over 20 years across multiple diverse industries.

She joined world-leading creator commerce platform Spring in 2015, and was at the company for seven years before taking on a new role earlier this year. Patricia explains, “I started Spring as the Regional European Supply Chain Manager and worked my way up to Vice President 111

(VP) of Global Supply Chain and Operations, overseeing all the supply chain that Spring had built. I have always been focused on the processes, end-to-end management and logistics, gaining a wealth of experience in this field during my time at Spring.”

Dedicated to powering commerce for the creator economy that has exploded in recent years, Spring now has more than nine million users.

Patricia says, “We have seen a rapid increase in the number of creators using the platform.

Spring allows them to monetise their efforts in creating content, so they can focus on what they do best, which is the creation process.”

Patricia describes the supply chain at Spring as ‘made to order’. It is a global network of carriers, suppliers and transportation companies that is regionalised, so the production network can be replicated in Spring’s main markets. Patricia explains, “We try to produce and fulfil all the orders as close to the customers as possible. If we see a market growing, we will try and set up our fulfilment network in that 112

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region. As of today, Spring has a very strong presence in North America, continental Europe and the UK. After Brexit, we had to reinvent our supply chain to make the experience smoother for our customers.”

Unlike traditional supply chain models, Spring is very demand-focused. This means they only manufacture when 114

an order exists, and do not rely heavily on forecasts.

Patricia continues, “It is very difficult to forecast because unpredictable events happen, as was the case with Covid.

We are therefore set up to produce only what has been purchased.”

There are two types of production model at Spring:

"Given our demanddriven supply network, we were able to be agile and flexible during Covid, shifting our production to where it could happen" In the first model, the products that we offer are created for immediacy. Off-the-shelf items are created, cut, printed and shipped in 24 to 48 hours. The product is more customised in the second model, with different patterns, silhouettes etc. Both models are about making sure the creators do not have to put up any money upfront, so there are no financial risks.”

1. Immediate fulfilment – the direct production of any order that has been placed in the platform.

2. Pre-sales – the consolidation of a number of orders during a pre-sale window. (Production only occurs when the window is closed.)

Patricia says, “The difference lies in the complexity of the product.

Speaking of unprecedented events, Patricia says Spring did not escape the impact of Covid, although the company was set up to weather the storm successfully. She says, “Given our demand-driven supply network, we were able to be agile and flexible during Covid, shifting our production to where it could happen. We experienced country lockdowns, labour shortages, stock shortages and delays in 115

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ports, but our initial set-up put us at an advantage. We are very interconnected with our partners in our network, and integrated with their systems, so in a matter of weeks, we could shift production depending on which production centre was up and running. There were delays due to the carriers having massive backlogs and longer transit times, but we managed to assign production and fulfilment

because we had a really good couple of years from a production perspective.”

Spring’s partnership with Lane Seven Apparel is a great example of a strong, long-standing relationship. Patricia explains, “It is not for us to suddenly find out that Lane Seven will have potential delays due to the backlogs at the port because we know where everything is at

"Lane Seven has been very flexible in helping us understand our demand in terms of volumes and quality of the product" orders to those partners that were capable of helping us.”

Demand exploded in the ecommerce ecosystem in 2019 and 2020. Patricia believes one of the keys to Spring’s success has been the relationships it has with its partners. She elaborates, “The way we treat our partners is extremely important. It has to be a close relationship because they need to adapt as fast as possible.

Covid actually strengthened many of these relationships

all times. This helps us massively because we can make sure products used in our platform and put in front of creators do not have major delays. Lane Seven has been very flexible in helping us meet our demand in terms of volumes and quality of the product. Creators want higher quality products and a good customer experience in terms of the reliability of the stock when promoting one of our designs.

Lane Seven work closely with us, sharing all the stock information 117

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"Full real-time visibility is a musthave for supply chains today.

You need to be interconnected, which is one of the things that Spring has always done"

we need to make informed decisions. They have been a great partner to Spring and will continue to be.”

So, what can a company do to improve its supply chain resilience and agility? Patricia answers, “The first step is to look at how you view your supply chain. You cannot have visibility with just your Tier 1 suppliers. It is crucial that you understand who you work with. It is not enough to rely on the last part of your chain either. You need to know where things come from and be able to map out the whole lifecycle of a product.”

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"Customers don’t want any more greenwashing. They are concerned about where their products come from, and you have to prove it"

Patricia summarises as follows: 1. Your approach – know where your products come from, do your due diligence, and identify risks where the supply chain could be broken if an unexpected event happens e.g. if you rely heavily on single-source suppliers, find alternatives.

2. Trust the IT systems – get integrated with a platform that allows you to connect with all your suppliers, collaborate online, and have full real-time visibility.

Patricia adds, “Full real-time visibility is a must-have for supply chains today. You need to be interconnected, which is one of the things that Spring has always done.”

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Being able to prove a product’s ESG performance level is also becoming increasingly important for supply chains. Patricia explains, “Customers don’t want any more greenwashing. They are concerned about where their products come from, and you have to prove it. At Spring, we started looking into the

materials we use, as well as asking for certificates when onboarding partners, so we know that they are doing their due diligence and making efforts to be more sustainable. When you source a new vendor, if you want a longstanding relationship, there has to be a match in terms of their vision of what the world should look like.

I think companies are making progress with their sustainability agendas, starting with visibility and taking steps to correct the things that need to be corrected.”

For large organisations with traditional supply chains and decades of history, change can be a difficult task. But people are 121

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starting to challenge the status quo, as Patricia explains, “The old model of outsourcing everything single-source to Asia or Central America, only thinking about the cost, is simply not working anymore. This is because these companies will struggle to adapt if there is disruption in the market, as well as requests to be more sustainable from customers, governments, and every single player.”

As for the future of supply chains, Patricia concludes, “It is exciting to see how companies are starting to adopt the Industry 4.0 approach, and looking into opportunities for near-shore production. Technology is allowing this change to happen. You can see more efficient, on-demand production set-ups alongside the concept of the microfactory, which is now becoming reality, as many big companies are starting to invest resources in this area. In the next five years, I believe we will see examples of brands bringing a portion of their production closer to the customer, as well as implementing microsite production sites.”

For further information on Spring, visit www.spri.ng 123

ROBOTICS

A RECORD YEAR

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Industrial robot orders in North America were up 14 per cent in 2021, compared to the previous high in 2017.

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A report by the Advancing Auto revealed that mo the US workforc ever before, taki as plucking bottl conveyor belts at plants, and puttin goods into card ecommerce w nd it looks like still more robots will come aboard in 2022, limiting the sting of labour whilst maximising the talents of current employees.

According to McKinsey, annual industrial robot installations are estimated to increase to 600,000 this year after already growing to 450,000 since 2015.

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Association for omation (A3) has ore robots joined ce last year than ing on jobs such les and cans from t trash recycling ng small consumer dboard boxes at warehouses.

Companies across North America laid out more than $2 billion for almost 40,000 robots in 2021. Robots went to work in a growing number of industries, expanding well beyond their historic surge in the automotive sector.

Jeff Burnstein, President of A3, said, “More industries 127

“Many companies are also tapping into automation in answer to the greater operational strain on their warehouses” 128

recognised that robotics could help reverse productivity declines and fill repetitive jobs human workers don’t want. It is no longer a choice whether to deploy robots and automation. It’s now an absolute imperative. As we’ve long believed – and users continue to confirm – robots help companies compete, ultimately creating more jobs to handle their growth.”

DCL Logistics in Fremont, California, started installing robots on ecommerce fulfilment lines during the pandemic. Brian Tu, Chief Revenue Officer, said, “With human labour, what they produce depends on if they’re hungry or are they tired or have they had their coffee.”

Many companies are also tapping into automation in answer to the greater operational strain on their warehouses. FedEx, for example, accelerated its robotics investments to better handle the variety of packages streaming through its sorting facilities.

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Factories and other industrial users ordered 28 per cent more robots last year than the previous year, according to the report. The previous annual record for robot orders was set in 2017 – when North American companies ordered 34,904 robots valued at $1.9 billion.

Some of the fastest growth in robot orders is in the metals and food and consumer goods industries. Ecommerce is another fast growth sector.

At DCL, which has five US fulfilment centres and will soon open a sixth, the lines that have robots can operate with fewer people – and yet produce 200 per cent more. Tu added, “We still have employees working around the robots, but we can reduce labour by roughly half.”

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There is also a growing trend for a new breed of ‘cobots’, designed to work alongside humans on assembly lines.

Universal Robots, a unit of Massachusetts-based Teradyne Inc (TER.O), specialises in cobots.

Joe Campbell, a Senior Manager for Applications Development, said, “The number one driver for automation is the labour shortage in manufacturing.”

But, cobots are making inroads into many other industries that long resisted automation. In construction, for instance, Universal Robots has sold robot arms to a firm that uses them to install drywall in large building projects, a notoriously labour-intensive process.

“cobots are making inroads into many other industries that long resisted automation”

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Auto plants are also finding new uses for cobots.

Stellantis N.V., the Dutch automotive manufacturer, is now using Universal’s cobots in the final assembly area of its factory in Turin, Italy, to help produce the new Fiat 500 electric vehicle.

The arms are attached to a framework that moves over the car, where they locate and fasten nuts.

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As a wider range of firms dives deeper into new uses of automation, they will need to navigate how much the technologies will impact their current workforce.

Change management is more important than the technology itself, according to Ted Dengel, FedEx Ground Managing Director of Operations Technology and Innovation. He said, “It's really about just being

“a new generation of rentable robots had made the costs feasible for facilities to make a measured entry into automation”

open and communicating very clearly out of the gates, ‘This is what this machine is going to do, and here's how you're going to interface with it’. We do a lot of time training and making sure they’re very comfortable with it before we start it. There's no mystery behind it.”

Meanwhile, a new generation of rentable robots has made the costs feasible for facilities

to make a measured entry into automation. Joe Montano, President and CEO of engineered polymer and adhesive products maker, Delphon, added, “By hiring robots to operate machines for pad printing and component cleaning, we were able to redeploy eight operators to other jobs and see a $70,000 return on investment in less than a year.”

Source: www.reuters.com 133

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